SUBJECTS: GLENCORE, COAL PRODUCTION, HUNTER’S ENERGY FUTURE.
DAN COX: When you think of the Hunter Valley, mining probably comes to mind. When you’re travelling the New England Highway, those open cut mines are a strong reminder of how many communities and families in our region rely on that industry but is the tide turning on coal?
JENNY MARCHANT: International mining giant Glencore which owns many of our mines in the Hunter has announced it will cap its coal production at its current levels and it cited the risk posed by climate change. It was really front of mind when it was making this decision. Here’s Glencore CEO Ivan Glasenberg making that announcement.
[AUDIO GRAB] IVAN GLASENBERG: Climate change, furthering our commitment to a transition to a low carbon economy we believe the company is well placed in this area. We have the right commodities we will limit our coal production capacity broadly to current levels and as you are aware we are producing - we have a capacity for around about 150 million tonnes of steam coal and we have agreed to limit it to that amount of capacity. That amount of tonne is going forward we will not increase the tonnage of thermal coal produced by the group on a future basis. As you are aware, cobalt, zinc, nickel, copper which is for battery supply and we continue to grow and hopefully grow in those areas which we will capitalise on that which is as we move the energy and mobility transition into electric vehicles we will be at the forefront producing the commodities in that area.
COX: Joel Fitzgibbon is the Labor Member for Hunter and the Opposition spokesman for Rural and Regional Australia. Good morning Joel.
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY AND SHADOW MINISTER FOR RURAL AND REGIONAL AUSTRALIA: Good morning team and congratulations on your new format and your new slot.
COX: Thank you Joel. Environment groups have welcomed this move by Glencore. Are you feeling as positive?
FITZGIBBON: It’s certainly something we need to take very seriously. I mean the coal mining industry is the beating heart of our region and in particular my electorate. It’s not just the thousands of employees directly but every business from the large manufacturing shops down to the local sandwich shop relies on the coal mining industry. When you go to the kids’ sport on the weekend the netball team, the footy team is in a strip sponsored by the coal mining companies. So it’s so important to our valley that we have to take it very, very seriously. Having said that Glencore is saying that it is not going to grow any bigger in the coal business. It is very big now. It will have a presence in the Hunter Valley for a very long time to come. And global demand for our relatively clean and efficient thermal coal will remain strong for many, many years to come and that leaves us well placed. I do believe we have a strong future and the industry continues to enjoy my very strong support.
MARCHANT: Does it not though signal a time where if not now, but in the medium to longer term future that coal will end in the Hunter? And therefore there are people heading off to work this morning who might be feeling pretty nervous?
FITZGIBBON: It certainly does and that’s why we have to take it seriously. And what we need to do and is what we’ve been doing and that is to be as inviting as we can and to make their investment decisions as easy as they can be. We can’t tell Glencore how much to invest in coal but we can invest in things like the Third Rail Track, which the former Labor Government did, and the Hunter Expressway. Things that make the economy more efficient and therefore more inviting for investment. But you know disruption is with us everywhere. When we think of disruption we generally think of technology, Air bnb, Uber, things like that but the really big disruptor is community attitudes to things like climate change. It’s not just the environmental groups, the electorate and society generally is moving and these big companies are thinking about their reputation. Supermarkets are getting rid of their plastic bags, energy companies are going to renewables and in a slightly different thing Burger King is going to vegan burgers, so they are reacting to changes in the community. As politicians we don’t have influence over those views or those preferences so we just have to have strategies in place to try to make these things a positive and part of our strategy in the Hunter has to be greater diversity. We have to fight for the retention of the coal mining industry but at the same time build diversity so that when it finally comes and it will come at some point, I’ll be gone- we will have other industries to fall back on.
COX: You talked about reputation there – we are hearing that Glencore has made this decision because of a push from shareholders. Do you anticipate that this is the start of mining companies diversifying because of climate change?
FITZGIBBON: I think that’s right and for those concerned about that I say don’t blame the politicians, don’t blame the key decision makers in Glencore or anywhere else, just put it down to the fact that people are changing their views from all the way from food to coal mining and they’re reacting to that. What we should do as politicians and as a community – our local economic strategist - is to build that diversity while at the same time, making sure we get as much out of coal mining as we possibly can while the good days last.
MARCHANT: You say electorate views are changing, this is a reflection of that, that Governments can’t influence those views, but you are there elected as the local member to represent those views in Canberra are those views being represented strongly? Are there plans far enough down the track to pick up where coal leaves off when that does eventually happen?
FITZGIBBON: Bill Shorten spoke at the annual Minerals Councils luncheon down here last week and he couldn’t have given any stronger support to the industry. He understands how many people rely on it and how important it is to regional economies. We are advocating hard but we have to be strategists as well. We have to be smart and think about – we can’t control Glencore. If Glencore tomorrow said we are just pulling out of coal, we don’t have any control over that so in this long period we have between now and when coal finally comes to an end in Australia and globally - and I hope that is decades away - we have to be smart and start diversifying even further and thinking about what we put in its place and look Liddell is the perfect example. Liddell Power Station is clapped out and is finished. It can’t be extended. Thankfully AGL is investing very heavily in power generation entities on that site- large scale solar, pumped hydro and battery storage. We need to put in place and encourage that sort of investment in our region.
COX: Joel thank you for your thoughts this morning and thanks for joining ABC Newcastle Breakfast. That is Joel Fitzgibbon Labor Member for Hunter and Opposition spokesman for Rural and Regional Australia.